If you are getting divorced in Maryland, pay attention to your Roth Individual Retirement Account. Depending on how your tax situation changes, you may be able to pay more into it, withdraw money from it or start one. You must act quickly because there are firm deadlines you need to meet.
Paying more into your Roth Individual Retirement Account
If a judge issues your divorce decree before December 31 of the current year, you must file your income tax as a single person. Therefore, only your income counts towards the limits and your spouse’s no longer counts. If you make less than $138,000 in 2023, you can put all your income into your retirement account. If you make between $138,000 and $153,000, you can choose to partially fund your Roth retirement account based on a particular schedule.
Opening a Roth Individual Retirement Account
If you and your spouse made over $214,000, you might have been stopped from opening a Roth Individual Retirement Account. Now that you are divorced, if you make less than $153,000, you may be able to open and fully or partially fund an account. Your ex-spouse’s income no longer matters.
Closing a Roth Individual Retirement Account
You may discover that you no longer qualify to put money into a Roth Individual Retirement Account because you make more than $153,000. Yet, you may have been paying into the account throughout the year. In that case, you have until December 31 to get your money back from the account.
Individuals getting divorced may need to change their Roth Individual Retirement Accounts by opening, funding or closing them.